Download - Banking terms and kinds of cheque
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Ch. 06: Bank & Banking
TransactionsTopics;• Definition of bank
• Types of bank accounts
• Advancing of loans
• Cheques and its types
• Important banking terms
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Definition of Bank
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Process of opening a bank
account1. Formal Application: for opening a bank account,
customer fills an application form .
2. Obtaining Introduction: Before opening a bank account, banker may ask some formal questions
from the customer
3. Specimen Signatures: When the banker is satisifiedabout the customer, he takes specimen signatures
from the customer on a card “signature card”
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Name of account holder:
SNAWER GILL____ Snawer
Snawer Snawer
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4. Initial Deposit: For opening a bank account, first deposit may be minimum of Rs. 500 or Rs. 1000
5. Operating of account: When an account is opened, banker gives to the customer following books to operate it;
• Pay-in-slip book
• Pass Book
• Cheque Book
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1. Pay-in-Slip Book: It is a book that contains blank printed form provided by the banker to its customer. It is used to deposit money into bank.
2. Pass Book: It is a book that is used to record all the banking transactions. All the amounts paid into bank and withdrawn from bank are recorded in it.
2. Cheque Book: It is a book that contains blank printed form provided by the banker to its customer. It is used to draw money from the bank.
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Loans and advancesBank makes the following types of
loans.• Short-term loans (for 1 year)• Medium term loan (for 1-5 years)• Long term loan (for 5 to 15 years)
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Bank Over draftSometimes, bank allows its trust
worthy clients to overdraw
money up to a certain limit, this
extra money is called overdraft.
Bank charge interest on this
money.
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Cheque and its Types
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Cheque
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1. Bearer Cheque: A chequethat is payable to any person
who may present it at bank on which it is drawn.
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2. Order Cheque: A cheque that is only payable to a person whose name is written on it. For the payment of this cheque, banker may demand identification from that person.
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3. Crossed Cheque: A cheque on which two parallel lines are drawn on its face. A crossed cheque can not be cashed at bank counter. Amount is transferred from bank to bank.
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4. Open Cheque: When a chequeis not croosed, it is said to be an open cheque. A crossed chequecan not be made an open chequewithout the signature of the accountholder.
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5. Post dated Cheque: A chequethat contains any future date or a date yet to come is called post dated cheque.
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6. Anti-dated Cheque: A chequethat contains any previous date on which it is drawn is called anti-dated cheque.
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6. Stale Cheque: A cheque that contains six month old date on which it is drawn is called stale cheque.
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6. Dishonoured Cheque: When a cheque is returned by the banker unpaid due to any reason is callleda dishonoured cheque
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Dishonouring of cheque
• Signatures are different
• amount in words and figures differ
• alterations are not signed
• insufficient funds in account
• payment is stopped by accountholder
• Stale cheque (6 mont hold date)
• etc
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ImportantTerms
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Postal Order: It is a written
order by which one post
officer requests the other
post officer to pay a
specific amount of money
to a specific person.
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Bank Draft: It is a written
order by which one Banker
requests the other banker
to pay a specific amount of
money to a specific
person.
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Treasury Order: It is a
written order by the
Government department to
a particular “government
treasury” to pay a sum of
money to the person
whose name is written
therein.
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Standing Order:
Sometimes, the banker
pays some expenses and
receives some incomes on
the behalf of the client.
This right of the bank is
called, standing order.
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